Former President Festus Mogae and Choppies Managing Director Ottapathu Ramachandran are expected to disclose to court the role they played in allegedly helping Choppies bypass provisions of Zimbabwe’s Indigenous Act.
This is expected to be at the center of the fresh case in which former Zimbabwean Vice President Phelekezela Mphoko and his son Siqokoqela are contesting the legality of the amount they were paid for their shares when they divested from Choppies.
According to papers filed with the High Court in Bulawayo, Mphoko and his son reiterate that at all material times they were majority shareholders in Choppies, holding an aggregate of 51% shares therein.
The Court papers state that Mphoko held 25.5% of the shareholding and Siqokoqela also held 25.5 of the shareholding in a joint venture identified as Nanavac Investments Pty ltd while Choppies Enterprises held the remaining 49%.
Through their lawyers, Ncube and Partners, the Mphokos state that in or about 2018, a dispute arose between Siqokoqela and Choppies which resulted in Choppies instituting legal proceedings against the Siqokoqela, his wife and Choppies in the High Court.
“The 2nd Defendant (Choppies) instituted malicious and false criminal complaints to the police resulting in the institution of the Magistrates’ Court Proceeding in Bulawayo against the 1st Plaintiff (Siqokoqela) and his wife. As a result of the said proceedings, the first plaintiff and his wife were arrested and detained,” the lawyers stated.
They say on 9 January 2019, in order to secure their freedom, Siqokoqela signed a deed of settlement with Choppies Enterprises in terms of which the Mphokos disposed of their shareholding to the company.
The lawyers said as per the deed of settlement the Mphokos were to paid the sum 2 900 000.00 by Choppies for the acquisition of the Mphokos full rights and title to the 1st defendant’s shareholding.
The lawyers said that deed of settlement signed between the parties on January 2019 was void for the following reasons;
The Mphokos signed it under duress after the arrest and dentition of Siqokoqela and his wife on malicious and false charges.
The said payment of Siqokoqela’s salary which was due from Choppies had been unlawfully stopped and the threats of foreclosure on mortgage bond in terms of which Siqokoqela had acquired fund from a local bank which the said plaintiff could only services if he was not in detention and was receiving his salary from Choppies.
Mphoko said he signed the deed of settlement in fear of the continued persecution of his son and his daughter in law at the hands of the second defendant.
“The unlawful deed of settlement understated the value of the shareholding owned by the Mphokos in that US$2 900 000.00 offered for the shares constituted about 7% (as opposed to 51%) of the value of shareholding in the 1st defendant which was given as US$44 000 000.00 at the Botswana Stok Exchange,” the lawyers argued.
They said Choppies paid the sum of US$2 900 000.00 (representing about 7% of the shareholding in the 1st defendant) in local currency when the shareholding was purportedly being acquired by a foreign entity and in terms of the impugned deed of settlement, the value of shares was in United States dollars.
The lawyers said their clients are entitled to 51% of the shareholding in Choppies in terms of the shareholders agreement of 24 July 2013, between the parties.
The Mphokos are seeking an order declaring as unlawful the deed of settlement in terms of which they were divested of their entire shareholding in Choppies null and void.
An order declaring that the Mphokos are entitled to payment of the true value of the shareholding which they held between them in Choppies before they were unlawfully divested of the entire shareholding by Choppies together with any interest payable thereupon.
Consequently, the Mphokos claim the sum of US$22 585 714.00 being the value representing the 51% shareholding which they held between them and Choppies before they were unlawfully divested of the entire shareholding by Choppies.
In a letter addressed to Mphoko when the fallout started, Mogae who is former Choppies Chairperson had informed the former that “…My brother I would like to bring the following facts to our attention: We entered into this partnership with a clear understanding of the shareholding of 93%shares to Choppies Enterprise and 7% to the Mphoko family , free of charge.” The Mphoko family has since denied this claim insisting that it was the majority shareholder.